Industry body Confederation of Indian Industry (CII) has recommended a series of regulatory relaxations for non-banking financial companies (NBFCs), including greater flexibility to raise long-term capital, easing of external commercial borrowing (ECB) conditions and a review of the 100% risk weightage on secured gold loans.
The recommendations, reported by CNBC Aawaz, are part of CII’s Reform Agenda submitted to the Finance Minister.
They represent the industry’s suggestions and do not reflect the government’s position.
CII has recommended that NBFCs be given adequate flexibility to raise long-term capital from high-net-worth individuals (HNIs), pension funds and insurance companies. It has also called for easing the conditions for external commercial borrowings by NBFCs.
On lending regulations, the industry body has suggested reviewing the 100% risk weightage on secured gold loans. It has also recommended reviewing the difference in tax rates between banks and NBFCs.
Other recommendations include allowing NBFCs to launch products just like banks, easing governance requirements for upper-layer NBFCs and reviewing the dividend policy for upper-layer NBFCs.
The CII Reform Agenda covers a wider set of financial sector issues, including banking, NBFCs and housing finance companies (HFCs), financial markets, insurance and pensions, private equity and venture capital, fintech and financial inclusion.
CII recommends regulatory relaxations for NBFCs in reform agenda submitted to Finance Ministry
